A new wave of travel startups is building momentum in the marketplace. Travel startups are on track raise more than $5 billion in venture capital worldwide this year, up from $1.6 billion in 2013. These businesses are, broadly speaking, larger and more mature than past generations. They are more likely to partner with industry incumbents and many even take direct investments from corporate venture capital arms.
This new generation includes unicorn startups, private companies valued at over $1 billion, across many travel sub-sectors such as tours and activities (Klook), hospitality (OYO Rooms), corporate travel (TripActions), and more.
Skift Research’s new e-book identifies three large themes as well as their impacts for investors and stakeholders in the industry: the center of gravity in travel is shifting eastward; alternative accommodations move beyond Airbnb; and tours and activities come online.
Skift Research recently published a limited edition e-book on the new wave of venture capital and startups in travel, and it’s only $50. It’s a lighter read than our standard in-depth reports, but still packed with the same interesting stats, graphs, and actionable takeaways that you have come to expect from us.
In fact, much of the original data is in this e-book is pulled from this year’s diverse slate of travel research topics, making it an ideal, and curated, entry point into the world of Skift Research. Below is an excerpt from our Skift Research e-book. Get the full e-book here to stay ahead of this trend.
The younger generation might be forgiven for thinking the vacation rental market only just sprung up over the last few years. That is of course, not the case. Vacation rentals have been available dating back to the 1980s and earlier. But there is no denying the impact that Airbnb has had in elevating the alternative accommodation experience in the public consciousness.
Adoption rates for alternative accommodations continue to rise on both sides of the pond. In the U.S., a Skift Research survey of affluent travelers found that both first-time and repeat usage of short-term rentals continues to rise within that demographic.
In Europe, nearly 40% of all room nights on the continent are spent in an alternative accommodation. Much that share growth is coming from foreign visitors, more willing to experiment with a different type of hospitality experience.
As Airbnb and the broader segment mature, startup funding trends are beginning to shift. Airbnb helped spark a Cambrian explosion of new businesses looking to further build out the global vacation rental ecosystem. Alternative Accommodation venture capital funding is now moving beyond Airbnb, which once crowded out almost all other financing in the space.
We see these startups championing a partial convergence between alternative and traditional accommodations from both a consumer behavior, and technological back-end perspective.
This cresting wave of new ventures will have implications for investors and incumbents alike. Their impact will be felt in further distribution competition, growing real estate investments, and the professionalization of vacation rental technology.
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